Free Response to Motion - District Court of Colorado - Colorado

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Criminal Case Nos. 02-cr-000485 and 04-cr-00449 (Civil Action No. 06-cv-02445-REB) UNITED STATES OF AMERICA, Plaintiff-Respondent, v. DENNIS S. HERULA, Defendant-Movant. ______________________________________________________________________ GOVERNMENT'S RESPONSE TO DEFENDANT'S MOTION TO VACATE, SET ASIDE, OR CORRECT SENTENCE PURSUANT TO 28 U.S.C. § 2255 _____________________________________________________________________ The United States of America, by and through Troy A. Eid, United States Attorney, and Andrew A. Vogt, Assistant United States Attorney, hereby responds to Defendant-Movant's Motion to Vacate Set Aside, or Correct Sentence Pursuant to § 2255 and states as follows: BACKGROUND On August 25, 2004, a federal grand jury in the District of Colorado charged Dennis S. Herula (hereinafter "Defendant") and a co-defendant, in a second superseding indictment in Criminal Case No. 02-CR-485, with seven counts of fraud by wire (Counts 1-7), in violation of 18 U.S.C. §§ 1343 and 2; and eight counts of engaging in monetary

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transactions in criminally-derived property (Counts 8-15), in violation of 18 U.S.C. §§ 1957 and 2.1 02/485 Doc. 155.2 On October 26, 2004, Defendant pleaded guilty to Counts 1-7 of the second superseding indictment, pursuant to a plea agreement with the government under Fed.R.Crim.P. 11(c)(1)(B). 02/485 Doc. 172; 02/485 Doc. 179. In exchange for Defendant's (a) guilty plea; (b) abandonment of his rights to the property for which the government was seeking forfeiture; (c) agreement to meet with prosecutors and government agents to give them a complete and truthful statement about the events giving rise to the charges against him, and (d) agreement to pay restitution to the victims of his crimes, the government agreed in the plea agreement (a) to recommend that Defendant be sentenced "at the bottom of the applicable guideline range as determined by the Court"; (b) "to dismiss all remaining counts" against Defendant; and (c) in the event Defendant elected to have similar fraud charges, which were expected to be filed in the District of Rhode Island, transferred to the District of Colorado for guilty plea and sentencing pursuant to Fed.R Crim.P. 20, to "not oppose his request to be sentenced in

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The indictment also contained a forfeiture count, Count 16.

Unless otherwise indicated, references to the relevant record of this Court in Criminal Case No. 02-CR-485 are indicated by "02/485," followed by the appropriate docket entry number. Likewise, unless otherwise indicated, references to the relevant record of this Court in Criminal Case No. 04-CR-449 (the "Rhode Island case") are indicated by "04/449," followed by the appropriate docket entry number.
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that case concurrently with any sentence imposed" in 02-CR-485. 02/485 Doc. 172 at 2-3. Additionally, the parties agreed that Defendant's sentence would be determined by application of the United States Sentencing Guidelines, with all relevant findings of fact made by the district court by a preponderance of the evidence, and that neither party would seek a departure from the tentative calculation of the applicable guideline range as set forth in the plea agreement. Id. at 2. The parties estimated Defendant's offense level to be 31, and his criminal history category to be III, resulting in an estimated guideline range of 135-168 months. Id. at 15-16. Meanwhile, on October 22, 2004, felony charges set forth in an information filed in the District of Rhode Island were transferred to the District of Colorado for plea and sentencing pursuant to Rule 20, were docketed as Criminal Case No. 04-CR-449, and were assigned, as a related case, to the same district judge as Case No. 02-CR-485. 04/449 Doc. 1; 04/449 Doc. 4. In the case from Rhode Island, Defendant was charged with one count of fraud by wire (Count 1), in violation of 18 U.S.C. § 1343; one count of money laundering (Count 2), in violation of 18 U.S.C. §§ 1956(a)(1)(B)(I) and 2; and one count of bankruptcy fraud (Count 3), in violation of 18 U.S.C. §§ 152(1) and 2. 04/449 Doc. 2. On November 4, 2004, Defendant pleaded guilty to all three counts in the case from Rhode Island pursuant to a plea agreement under Rule 11(c)(1)(B). 04/449

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Doc.7; 04/449 Doc. 13.3 In the plea agreement, Defendant agreed that the court could impose the maximum term of imprisonment supported by the facts relevant to his case. As in the plea agreement in Criminal Case 02-CR-485, Defendant (a) in essence, waived any rights under Apprendi/Blakely by agreeing to have the court find, by a preponderance of the evidence, the facts upon which his sentence would be based; (b) agreed to meet with prosecutors and government agents prior to the entry of his guilty plea to give them a complete and truthful statement about the events leading to the charges against him; and (c) agreed to pay restitution in the amount of $13,374,065.70 to the victims of his crimes. 04/449 Doc. 7 at 2-3.4 For its part, the government agreed (a) to recommend that Defendant receive a reduction in his offense level pursuant to U.S.S.G. § 3E1.1 for acceptance of responsibility; (b) to recommend a sentence of 121 months; and (c) to not oppose a request by Defendant that the sentence imposed in this case be served concurrently with that imposed in Criminal Case No. 02-CR-485. Id. at 3-4. On February 11, 2005, after the Supreme Court's decision in United States v. Booker, 534 U.S. 220 (2005), had been announced, this Court conducted a consolidated

Until Defendant pleaded guilty in 04-CR-449 on November 4, 2005, and this Court thereafter conducted a consolidated sentencing proceeding, the grouping provisions under U.S.S.G. § 5G1.2 were not in question in either case. Apprendi v. New Jersey, 530 U.S. 466 (2000); Blakely v. Washington, 542 U.S. 296 (2004).
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sentencing proceeding in Criminal Case Nos. 02-CR-485 and 04-CR-449. 02/485 Doc. 206. Defendant disputed the grouping of counts from both cases together pursuant to U.S.S.G. §§ 5G1.2 and 3D1.2(d) as set forth in the consolidated Presentence Investigation Report (PSR) prepared by the Probation Department. Id. at 5-7. See 02/485 Presentence Investigation Report at 7-11. After considering the positions and arguments of the parties and the Probation Department concerning the proposed application of §§ 5G1.2 and 3D1.2(d), the Court adopted the reasoning and authorities set forth by the Probation Department whereby counts of conviction in the case from Rhode Island, 04-CR-449, were to be treated as additional counts to be grouped with those in 02-CR-485, pursuant to the 2002 version of the Guidelines, the version in effect when the latest crimes were committed. 02/485 Doc. 206 at 20-21. Thus, Counts 1-7 of 02-CR-485 (wire fraud) and Counts 1 and 3 of 04-CR-449 (wire fraud and bankruptcy fraud, respectively), all of which were covered by U.S.S.G. § 2B1.1, primarily on the basis of the amount of money involved, were grouped together and the specific offense characteristics of § 2B1.1 were applied based on Defendant's conduct in both cases, considered as a whole. See 02/485 Presentence Investigation Report at 7-11.

Accordingly, the Court found Defendant's total offense level to be 35 and his criminal history category to be II, resulting in an advisory guideline range of 188 to 235 months. 02/485 Doc. 206 at 21-22, 24. The Court then imposed a sentence of a total of 188

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months of imprisonment in 02-CR-485 and a total of 188 months in 04-CR-449, and ordered that both sentences be served concurrently, for a total sentence of 188 months of imprisonment. Id. at 24-25; 02/485 Doc. 211; 04/449 Doc. 15. Additionally, the Court stated that, even if the Guidelines had not been considered, "the court's sentence would be the same, if not greater, under its independent analysis under 18 U.S.C. § 3553(a)." 02/485 Doc. 206 at 29. Judgment was entered on the court's docket in both cases on February 17, 2005. Defendant filed direct appeals in both cases and his motion that the appeals be consolidated was granted. Defendant argued on appeal, inter alia, that the sentence imposed by this Court was unreasonable because (1) the Court erred in its calculation of the applicable advisory guideline range by treating the Colorado and Rhode Island counts as "multiple counts" for purposes of U.S.S.G. § 5G1.2; and (2) the parties did not anticipate the greater sentence that resulted from the treatment of the Colorado and Rhode Island counts in this manner under § 5G1.2. The United States Court of Appeals for the Tenth Circuit affirmed the judgment of this Court on September 21, 2006. United States v. Herula, 464 F.3d 1132 (10th Cir. 2006). Defendant did not petition the Supreme Court for certiorari, and the judgment of this Court therefore became final on December 20, 2006.

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Meanwhile, on December 6, 2006, Defendant had filed a motion pursuant to 28 U.S.C. § 2255 to vacate the judgment of this Court on the ground that he received ineffective assistance of counsel from his attorney, H. Michael Steinberg, in violation of his Sixth Amendment right to counsel. 02/485 Doc. 278; 04/449 Doc. 27. The Court has ordered that the government respond thereto on or before February 21, 2007. 04/449 Doc. 30. DISCUSSION Generally, to establish a claim of ineffective assistance of counsel, a defendant must show (1) that his counsel's performance fell below the constitutional minimum guaranteed by the Sixth Amendment, that is, "an objective standard of reasonableness," and (2) that his counsel's errors prejudiced him, that is, "were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable." Strickland v. Washington, 466 U.S. 668, 687-88, 690 (1984). Prejudice is "a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Id. at 694. "A reasonable probability is a probability sufficient to undermine confidence in the outcome." Id. However, a court may not set aside a conviction or a sentence solely because the outcome would have been different absent counsel's deficient performance." Lockhart v. Fretwell, 506 U.S. 364, 369-70 (1993). In order to

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demonstrate prejudice, a movant under 28 U.S.C. § 2255 must establish that counsel's performance rendered the proceedings "fundamentally unfair or unreliable." Id. at 369. Counsel's performance is judged on a reasonableness standard, viewing all circumstances at the time when the conduct occurred. Strickland, 466 U.S. at 690; United States v. Smith, 10 F.3d 724, 728 (10th Cir. 1993). There is a strong presumption that counsel's performance was not ineffective and "`f[ell] within the wide range of reasonable professional assistance.'" United States v. Clonts, 966 F.2d 1366, 1370 (10th Cir. 1992) (quoting Strickland, 466 U.S. at 689). To overcome this strong presumption, a defendant "must shoulder a heavy burden." Catches v. United States, 582 F.2d 453, 457 (8th Cir. 1978). The Supreme Court has recognized that [t]here is a strong presumption that counsel's performance falls within the wide range of professional assistance, . . . the defendant bears the burden of proving that counsel's representation was unreasonable under prevailing professional norms and that the challenged action was not sound strategy. The reasonableness of counsel's performance is to be evaluated from counsel's perspective at the time of the alleged error and in light of all the circumstances, and the standard of review is highly deferential. Kimmelman v. Morrison, 477 U.S. 365, 381 (1986) (citations omitted) (emphasis added). If a movant fails to satisfy either prong of the Strickland test, the ineffective assistance of counsel claim must fail. See Strickland, 466 U.S. at 697. In the instant case, viewing all the circumstances at the time when the conduct occurred, the

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performance of defense counsel was objectively reasonable and effective, and Defendant suffered no prejudice therefrom. A. Counsel's performance was not objectively unreasonable.

Defendant now complains that the failure of his counsel to recognize applicability of the grouping provisions of U.S.S.G. § 5G. 1.2 in calculating the estimated applicable advisory guideline range constitutes a violation of Defendant's Sixth Amendment right to the effective assistance of counsel. This claim is but a variation of the claim Defendant asserted on direct appeal that the sentence imposed by this Court was unreasonable in part because the Court "did not use its discretion under the Booker decision to arrive at the result that [counsel] was unable to do in drafting the plea agreements," see Motion at 5-A ­ i.e., that this Court erred by imposing a sentence in which the grouping provisions of § 5G1.2 was applied instead of the lesser sentence that counsel had incorrectly estimated in the plea agreements.5 Even in the context of the Sixth Amendment, however, the claim continues to be without merit. In support of his ineffective assistance of counsel claim, Defendant now points to a statement made by his counsel at the sentencing hearing that suggests that counsel's miscalculation in estimating the advisory guideline range resulted from counsel's having

Defendant argued in his direct appeal that "enforcing a provision of the guidelines that was unanticipated by the parties makes his sentence unreasonable under Booker." Herula, 464 F.3d at 1137.
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an "interpretation" of § 5G1.2 that differed from the Court's, and from counsel's confusion in attempting to understand the Guidelines: Judge, in the final analysis, I, as a practitioner of only criminal defense law in my entire life, and in large part a criminal prosecutor in Arapahoe County, have never really been totally comfortable with the federal sentencing guidelines. I am not sure at times, Judge, I had the capacity to understand them. I tried the best I could in my letter to the probation department to express my interpretation of the grouping provisions and the effect of 5G1.2's commentary to the section dealing with concurrent sentencing. Motion at 5-A (quoting 02/485 Doc. 206 at 6-7). The difficulty counsel acknowledged in correctly understanding the grouping provisions of § 5G1.1 does not, however, set him apart from the rest of the legal profession. As the Court of Appeals noted in affirming the judgment of this Court, the grouping rules of the Guidelines are a "labyrinth" in which "`practical judgments, unexplained policy choices, and extreme complexity are so fused that even the most expert of lawyers and judges can be led astray.'" Herula, 464 F.3d at 1136-37 (quoting United States v. Hernandez-Coplin, 24 F.3d 312, 320 (1st Cir. 1994)). Thus, it cannot fairly be said that counsel's interpretation of § 5G1.2 placed his representation of Defendant outside the "wide range of reasonable professional assistance," especially in view of the fact that the correct application of § 5G1.2 was not

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addressed in a published opinion in the Tenth Circuit until the Court of Appeals subsequently decided Defendant's direct appeal.6 Furthermore, "a miscalculation or erroneous sentence estimation by defense counsel is not a constitutionally deficient performance rising to the level of ineffective assistance of counsel." United States v. Gordon, 4 F.3d 1567, 1570-71 (10th Cir. 1993) (citations omitted). See also United States v. Sanchez, 146 F.3d 796, 797-98 (10th Cir. 1998). Moreover, counsel's advice to Defendant to transfer the Rhode Island case to the District of Colorado for guilty plea and sentencing pursuant to Rule 20 was objectively reasonable despite the unexpected application of the grouping provisions of § 5G1.2 because, as the Court of Appeals pointedly noted, if the Rhode Island case had not been transferred to Colorado, it is "probable" that the district court in Rhode Island would have imposed a sentence to be served consecutively to, rather than concurrently with, the sentence imposed in Colorado. See Herula, 464 F.3d 1138 n.7. Thus, notwithstanding counsel's error in predicting the sentence that would likely be imposed by this Court under the advisory Guidelines, counsel's advice to transfer the Rhode Island case to

The Court of Appeals noted that "Application Note 1 to § 5G1.2 is seldom applied and, unsurprisingly, there is a dearth of case law interpreting it." Herula, 464 F.3d at 1136.
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Colorado under Rule 20 was sound strategy that was well within "the wide range of reasonable professional assistance." Accordingly, Defendant has failed to meet the first prong of the Strickland standard. B. Defendant suffered no prejudice from the alleged error of his counsel.

Defendant's § 2255 motion is chiefly remarkable for what he does not say in it. He does not say that, but for the error of his counsel in estimating the applicable advisory guideline sentence, he would not have pleaded guilty to the Colorado and Rhode Island charges. He does not say that, but for the error of his counsel in estimating the applicable advisory guideline sentence, he would not have moved to transfer the Rhode Island case to Colorado pursuant to Rule 20. He does not say that he is actually innocent of the charges in either case. Indeed, such representations by Defendant would simply be implausible. Defendant thus fails to explain precisely how he suffered prejudice from the error of his counsel in estimating the applicable advisory guideline range. Moreover, Defendant does not seek to withdraw his guilty pleas in either the Colorado case or the case from Rhode Island, nor does he seek to reverse the Rule 20 transfer of the Rhode Island case so that he can be separately tried and sentenced in the

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District of Rhode Island.7 Rather, Defendant asks this Court only to vacate the sentence imposed on him and to resentence him "in accordance with the intent of the parties," Motion at 8 ­ as if the Court of Appeals had not already rejected his claims (1) that he did not understand that the parties' estimate of the applicable advisory guideline range and the government's sentence recommendation were in no way binding on the Court; and (2) that the sentence imposed by this Court was in some way erroneous, inappropriate or unreasonable. Thus, in seeking through § 2255 precisely the same remedy he was denied in his direct appeal, Defendant is attempting to retain the very substantial benefits secured by his counsel's actions while simultaneously arguing that he was prejudiced by those same actions. As the Court of Appeals correctly observed, it is clear that Defendant benefitted by transferring the Rhode Island case to Colorado for guilty plea and sentencing: Ironically, if we were to adopt Herula's arguments and allow him to be resentenced separately on the Colorado indictment and Rhode Island information, it seems probable his sentence would be higher. Although his recommended range would be lower, the district court would be free to impose consecutive rather than concurrent sentences on remand. See 18 U.S.C. § 3584(a); USSG § 5G1.3(a). The government's recommendation for concurrent sentences would not be binding on the district court. Thus, although Herula's sentencing range was higher than anticipated, he still benefitted from having both cases grouped as multiple counts.

If the sentence in 04-CR-449 were to be vacated and Defendant were to withdraw his guilty plea in that case, the case would necessarily be returned to District of Rhode Island for further proceedings. See Fed. R. Crim. P. 20.
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Herula, 464 F.3d at 1138 n.7 (emphasis added). Thus, Defendant cannot demonstrate that he suffered any prejudice by his counsel's error in estimating the applicable advisory guideline range. Indeed, any suggestion that a rational defendant would have preferred to subject himself to consecutive sentences imposed in two different jurisdictions, rather than accept a relatively modest increase in concurrent sentences under the grouping provisions of § 5G1.2, is simply implausible. Furthermore, as the Court of Appeals also noted in this case, Defendant's plea agreement in the Colorado case specifically notified him that "the court may impose any sentence, up to the statutory maximum, regardless of any guideline range computed, and the Court is not bound by any position or recommendation of the parties." Id. at 1137 (quoting 02/485 Doc. 172 at 14). Likewise, [t]he Rhode Island plea agreement similarly provided that "the Court may impose any sentence, up to the statutory maximum, regardless of any guideline range computed, and that the Court is not bound by any position of the parties." Id. (quoting 04/449 Doc. 3 at 17). Thus, in agreeing to plead guilty to both cases in the District of Colorado, Defendant could not have been relying solely on his counsel's estimation of the applicable advisory guideline range and cannot therefore demonstrate that he was prejudiced by his counsel's error in estimating the applicable advisory guideline range.

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Defendant appears to attempt to compensate for the lack of prejudice from his counsel's guideline calculation error by implying that he was prejudiced by the failure of his counsel to negotiate plea agreements with the government under Rule 11(c)(1)(C) in which this Court would be obliged to impose a sentence based on the guideline range estimated by the parties, regardless of whether that guideline range had been calculated correctly. Defendant points to language in the opinion of the Court of Appeals suggesting that, if Defendant had intended to ensure that the guideline range estimated by the parties would determine the sentence imposed by the Court, rather than an independent calculation by the Court, he should have negotiated a plea agreement under Fed.R.Crim.P. 11(c)(1)(C): Rule 11(c)(1)(B) makes clear that the district court is not bound by a recommendation by the government as to a particular sentence or sentencing range. If Herula wanted to ensure a certain sentencing outcome in exchange for his guilty plea, he should have negotiated a firm agreement to a specific sentence or range. Motion at 5-A (quoting Herula, 464 F.3d at 1138 (citing Fed.R.Crim.P. 11(c)(1)(C)). The implication that counsel's performance was constitutionally deficient in not negotiating a plea agreement under Rule 11(c)(1)(C) and that Defendant was somehow prejudiced by that alleged failure can only be based on pure speculation and wishful thinking. Defendant can point to absolutely nothing in the record to support the supposition that the government would have agreed to enter into a plea agreement with

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Defendant under Rule 11(c)(1)(C) or that this Court would have accepted such a plea agreement even if one had been tendered. To the contrary, it is clear from the affidavit of Linda Kaufman, the Assistant United States Attorney in the District of Colorado who was the lead prosecutor in Defendant's cases before this Court, that the government would not have agreed to a stipulated sentence under Rule 11(c)(1)(C) in either case. See Kaufman Affidavit, Attachment 1 hereto. Accordingly, Defendant cannot demonstrate that he suffered any prejudice whatsoever from the error of his counsel of which he now complains, and he has therefore also failed to meet the second prong of the Strickland standard. CONCLUSION For the above stated reasons, Defendant has failed to allege and support facts which demonstrate that the advice and representation he received from his counsel, H. Michael Steinberg, was outside the "wide range of reasonable professional assistance." Equally important, Defendant has failed to demonstrate that he suffered any prejudice whatsoever as a result of the error by his attorney of which he now complains. Indeed, Defendant does not assert that, notwithstanding his admissions to this Court, he is actually innocent of the offenses which he admitted, nor does he explicitly make the implausible assertion that, but for the error by his counsel of which he now complains, he would not have availed himself of the considerable benefits of the plea agreement his

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counsel negotiated on his behalf, but would have instead chosen to subject himself to the near certainty of consecutive sentences imposed by different courts. Movant has failed to meet either prong of the Strickland standard. Thus, "the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief." See 28 U.S.C. § 2255. Accordingly, an evidentiary hearing in this matter is unnecessary and the § 2255 motion should be denied on the basis of the existing record. Respectfully submitted, TROY A. EID United States Attorney

s/ Andrew A. Vogt ANDREW A. VOGT Assistant United States Attorney Colorado Bar # 004371 1225 Seventeenth Street, Suite 700 Denver, Colorado 80202 (303) 454-0100 E-mail: [email protected] Attorneys for Plaintiff-Respondent

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CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on this 21st day of February, 2007, a true and correct copy of the
foregoing GOVERNMENT'S RESPONSE TO DEFENDANT'S MOTION TO VACATE, SET ASIDE, OR CORRECT SENTENCE PURSUANT TO 28 U.S.C. § 2255 was placed in the U.S. Mail, postage paid, to: Dennis S. Herula Reg. No. 05233-070 Federal Correctional Institution P.O. Box 7000 Fort Dix, NJ 08640

s/Dorothy Burwell

Dorothy Burwell United States Attorney's Office 1225 17th Street, Suite 700 Denver, Colorado 80202 Telephone 303-454-0100 Fax: 303-454-0400 E-mail: [email protected]

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